During the week we will see a lot of quarterly earnings reports. A lot of major players will reveal their data already on Wednesday. Knowing the background before the report is released, is always a useful tool to get yourself ready.What’s the recent news connected to the companies, due to release their reports in April, which can influence the report and traders’ attitudes?
Facebook: a lot of attention was drawn to Facebook this month, including the Cambridge Analytica Scandal, as well as Mark Zuckerberg Congress Testimony. OTR Global downgraded Facebook from positive to mixed, predicting a slowdown in advertising earnings in the first quarter. The research firm expects annual growth in advertising spending to rise from 19% to 24%, compared to a 30% increase in the fourth quarter of 2017.
OTR became the first company from Wall Street, that lowered Facebook’s rating.
Twitter: chief executive officer and co-founder of Twitter Jack Dorsey was able to change the dynamics mainly due to news streaming implementation. Moreover, Twitter had partnerships with newsletters and sports federations attracting a wide variety of advertisers. Among the big players were Goldman Sachs and AT&T, giving the ability to place their ads directly in customer news feeds, as well as the possibility of conducting advertising campaigns and live broadcasts attracted them. The company claims that video advertising is now its most popular advertising format. Within the fourth quarter, the number of active daily users increased by 12% according to investing.com.
eBay: new methods of advertising. hey are now shifting to first party advertising, which means less redirecting to other webpages and more customers staying on the initial web page of eBay. It is reported that it could be a real profit driver. What is even more interesting – eBay saw growth in U.S. marketplace gross merchandise volume from 1% to 7% over the past five quarters, despite the hard competition from Amazon and Walmart.
PayPal: they added 8.7 million customer accounts, an increase of 61% from the fourth quarter during last year. Meaning there is a small slowdown in new accounts numbers. However one of the major points is engagement, which PayPal has managed to increase. Now transactions per account reaching 33.6 transactions per customer. Among the other big drivers bringing in more users and increasing engagement is the mobile application, which of course is one of the strengths of PayPal. Constant development helped them to see a major growth in users of the mobile application. One negative is the recent news of eBay’s plans to launch an inhouse payments procedure.
Amazon: the report will be released on Thursday. According to the forecasts, the company’s revenue will grow by 40% according to investing.com. The reasons are the continuing expansion of this online retailer into the sphere of cloud computing and traditional grocery stores. It is interesting to see the impact of US President Donald Trump’s accusations that the company is using unfair commercial advantages, including the use of the US Postal Service.
According to the forecasts, profits of American companies, which are included in the S&P 500 index, will be the largest for seven years. According to FactSet, 80% of 87 companies out of the S&P 500 index, which has already published their quarterly reports, exceeded analysts forecasts in terms of profit.
According to Capital.com ’s data, traders were mostly interested in eBay at the beginning of the month, opening around 20% short positions. Twitter was popular among traders in the beginning and second half of the month, around 30 percent of short positions were opened. As that was the month of news connected to Facebook, a lot of traders’ attention was drawn to it, beginning from 10 April, the number of trades rose more than 70% and around 20% of positions opened were short.
PayPal was not that popular among Capital.com users.
Amazon had more attention at the beginning of the month, traders opened 30% of short positions then, closer to 20 April, a rise in the number of trades was seen.
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It’s important to remember that you trade at your own risk. You can lose all your invested capital once you begin trading. Do not, in any circumstance, trade with money that you can’t afford to lose. This commentary shall not be regarded as investment advice.